Face­book braces app mak­ers for ad crunch af­ter iPhone switch

The Daily Telegraph - Business - - Technology Intelligen­ce - By James Tit­comb in San Fran­cisco

FACE­BOOK has warned thou­sands of iPhone app mak­ers that they face a bru­tal down­turn in ad­ver­tis­ing rev­enues due to forth­com­ing pri­vacy changes in­tro­duced by Ap­ple.

The so­cial me­dia gi­ant said around 19,000 de­vel­op­ers that use its ad­ver­tis­ing net­work could see in­come from ads more than halve in the new ver­sion of Ap­ple’s op­er­at­ing sys­tem.

IOS 14, the new soft­ware due to be re­leased for around a bil­lion iPhones later this year, will re­quire apps to ob­tain con­sent for us­ing a track­ing iden­ti­fier that al­lows ad­ver­tis­ers to tie pro­files to a par­tic­u­lar de­vice.

An­a­lysts be­lieve the ma­jor­ity of us- ers will de­cline to opt in, mak­ing tar­geted ad­verts far less ac­cu­rate and valu­able than they cur­rently are.

Face­book, the world’s sec­ond-big­gest dig­i­tal ad­ver­tiser, runs a sprawl­ing net­work that al­lows apps such as mo­bile games to run ad­verts us­ing its tech­nol­ogy, a busi­ness that is worth bil­lions to the com­pany. It has is­sued a warn­ing to app pub­lish­ers, say­ing Ap­ple’s changes could ul­ti­mately lead it to stop op­er­at­ing the net­work.

“This is not a change we want to make, but un­for­tu­nately Ap­ple’s up­dates to iOS 14 have forced this de­ci­sion. We know this may se­verely im­pact pub­lish­ers’ abil­ity to mon­e­tise through Au­di­ence Net­work on iOS 14 and, de­spite our best ef­forts, may ren­der Au­di­ence Net­work so in­ef­fec­tive on iOS 14 that it may not make sense to of­fer it on iOS 14 in the fu­ture,” it said.

“We un­der­stand that iOS 14 will hurt many of our de­vel­op­ers and pub­lish­ers at an al­ready dif­fi­cult time for busi­nesses. We work with more than 19,000 de­vel­op­ers and pub­lish­ers from around the globe, and in 2019 we paid out bil­lions of dol­lars. Many of these are small busi­nesses that de­pend on ads to sup­port their liveli­hood.”

Face­book said its own apps would not re­quest de­vice IDs from iPhone users. Ap­ple has said the changes will im­prove users’ pri­vacy, and they still have the abil­ity to opt in to track­ing if they wish. It is also ex­pand­ing its own tech­nol­ogy for build­ing ad­ver­tis­ing net­works, which the com­pany says pre­serves pri­vacy, in iOS 14.

Last month, Mark Zucker­berg, Face­book’s chief ex­ec­u­tive, said that at­tempts to limit ad­ver­tis­ing could be dra­matic enough to dam­age eco­nomic growth.

In June, ad­ver­tis­ing lobby group the Net­work Ad­ver­tis­ing Ini­tia­tive sug­gested Ap­ple’s move was mo­ti­vated by fi­nan­cial in­ter­ests, say­ing the iPhone maker would ben­e­fit if more apps ended up charg­ing for ser­vices since Ap­ple took a cut of app pur­chases.

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